Nairobi, January 30, 2024 – Kalonzo Musyoka, the leader of the Wiper Party, has made a bold promise to repeal the controversial Housing Levy as his first act if elected President of Kenya. Describing the levy as a “slush fund,” Musyoka emphasized the need to eliminate what he perceives as an irregular financial mechanism.
In an official statement released on Tuesday, January 30, 2024, Musyoka criticized the Housing Levy, characterizing it as a fund earmarked for unforeseen and often illicit expenditures. He stated, “As President, my first Executive Order will be to repeal the Housing Levy, which is a Slush Fund.”
This declaration follows closely on the heels of the Court of Appeal’s recent decision to reject the plea to suspend the High Court’s ruling that certain sections of the Finance Act, 2023, including the Housing Levy, were unconstitutional.
The Court of Appeal, consisting of Justices Lydia Achode, John Mativo, and Mwaniki Gachoka, dismissed the appeal made by Cabinet Secretary National Treasury and Planning Njuguna Ndungu, Attorney General Justin Muturi, and the Kenya Revenue Authority. The court asserted that suspending the High Court judgment might lead to irreversible decisions should the appeal ultimately affirm the ruling.
In their decision, the appellate judges acknowledged that the Housing Levy was targeting specific segments of the Kenyan population. They expressed the opinion that public interest warranted waiting for the outcome of the appeal process. Consequently, the Federation of Kenya Employers (FKE) issued a directive to employers to halt the deduction of the Housing Levy in light of the Court of Appeal’s decision.
The FKE advisory, issued on January 26th, 2024, highlighted the Court of Appeal’s dismissal of the stay application filed by the government. The court had noted that the levy was introduced without a legal framework and emphasized its decision was based on public interest, favoring a pause in the deduction pending the appeal’s determination.
“In light of the court order, we advise our members not to deduct the levy unless the Court of Appeal rules otherwise after the hearing of the substantive appeal, or in the alternative, should the government challenge the said ruling in the Supreme Court,” stated the FKE advisory.
The controversy surrounding the Housing Levy and other sections of the Finance Act stemmed from a November 28, 2023, ruling by a three-judge bench comprising Justices David Majanja, Christine Meoli, and Lawrence Mugambi. The bench declared the Housing Levy unconstitutional, citing a violation of the Constitution as it exclusively targeted employed Kenyans for deductions.
As the political landscape intensifies in the run-up to the elections, Kalonzo Musyoka’s commitment to repealing the Housing Levy stands as a significant policy stance that is likely to garner attention and influence public discourse on financial matters in Kenya.